It does fall into the EU and is canon. However, there are several conflicts with other sources and some of the feats achieved by characters seem fantastic, even by Jedi standards. Perhaps the most common way to look at the series is that the events depicted are canon (the Battle of Muunilist, the capture of Palpatine by Grevious, etc.) and actually happened in the Star Wars universe. The way these events played out on screen are probably over the top and weren't quite as spectacular "in real life". For example, Mace probably didn't singlehandedly destroy thousands of battle droids on Dantooine and jump several miles, etc. Perhaps what we see is the stories as told by locals or in reports that embellish the truth.

However, I think its status as 'Expanded Universe' is debatable. The capture of Palpatine happened even if you just watch the movies and not Clone Wars. Stuff like the Jedi Civil War or the Yuuzhan Vong invasion would have not happened if you haven't played the games or read the books. I might have put it in bad wording, but do you see what I'm saying? Because this piece of work is set within the 6 movies and not in the future or past, it can't really be Expanded Universe, because it happened even if you just watch the movies.

There's no mystery or debate here. CW is canon, but shares teh same level of canon as any book or even game.

Read the thread about Lucasfilm's canonical classification system.

The Clone wars occupies their designated C-level canon for many reasons. The CW microseries often also presents some contradictions in its description of events before and during the Battle of Coruscant(compared to other sources).

Its always funny how people think CW is more valid because it was a TV show, as opposed to a book or a game.

i always saw clone wars as having a little bit higher level of canon than regular books because of the level of involvement by lucasarts and the little things added into the movies like shaak ti on grevious's ship (granted it was cut in the final cut and the final edit kinda made that scene impossible but its still was consider by lucas himself), kinda like what i consider the level of shadows of the empire because of the outrider's appearance in the special editions and how the book, comic, and game were developed together. although it can be argued that a lot of books/games belong in a mid-level and canon level wouldn't be as clear cut as it is with the system that is posted on this board.

Keep in mind that much of the content of the clone wars was devised by Genndy Tartakovsky and the animators, and not by Lucas himself. Like authors and game designers they worked from guidelines and then approvals from Lucasfilm. That is why they are given the same level of canon as those things.